HCL Tech Q2 net profit seen up at Rs 366.7 cr

India's fourth largest software services exporter HCL Technologies is set to announce its results for the quarter ended December 2010. According to CNBC-TV18 estimates, its net profit is expected to go up at Rs 366.7 crore in Q2 as against Rs 331 crore in Q1FY11.

Revenues in terms of dollar are seen going up at USD 857.42 million versus USD 804 million and in ruppe terms, revenues are likely to be at Rs 3840 crore as against Rs 3708 crore.

Earning before interest, depreciation, tax and amortisation (EBIDTA) is expected to go up at Rs 611 crore from Rs 603.3 crore.

Q2FY11 expectations
* Expect revenue growth of 6% in dollar terms (QoQ)
* Expect growth to be led equally by application services and IMS.
* 28% exposure to GBP/EUR to aid dollar-revenue growth.
* Expect margins to be down slightly due to continued losses in BPO and Rupee appreciation
* Previous quarter profit includes forex loss of US dollar 14.2 million; forex losses of USD 5 million expected in Dec quarter.
* Expect positive comments on deal pipeline, BPO business likely to remain troubled
* Key things to watch - outlook for pricing/volumes; margin commentary; large deal announcements

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Omkar Speciality Chemicals IPO to open on Jan 24

Omkar Speciality Chemicals is entering capital market with an initial public offering of 81 lakh equity shares of Rs 10 each on January 24. The issue constitutes 41.27% of the fully diluted post issue paid-up capital of the company.

The company has fixed price band at Rs 95-98 per equity share for the issue, which closes on January 27. Bids can be made for minimum 60 equity shares and in multiples of 60 equity shares therafter.

Omkar Speciality hopes to raise Rs 76.95-79.38 crore through issue, which are proposed to be deployed for setting up of new manufacturing facility at Unit 4 at Badlapur, Maharashtra, with cost of Rs 32.16 crore; expansion of existing manufacturing facilities at Unit 1, Unit 2 & Unit 3 at Badlapur, Maharashtra, with Rs 14.62 crore; and working capital requirements of Rs 10 crore.

Company is mainly engaged in the manufacture and sale of speciality chemicals viz. selenium compounds, iodine compounds, molybdenum compounds etc. and pharma intermediates viz. Potassium Iodate, Bismuth Ammonium Citrate, Bromoform etc.

For the period of six months ended on September 30, 2010, it has reported net profit of Rs 5.05 crore on total income of Rs 51.56 crore.

Almondz Global Securities Ltd is the book running lead manager to the issue.

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Mobile number portability to come in force from Jan 20: TRAI

After a long wait, the Mobile Number Portability (MNP), which allows a mobile subscriber to change his service provider without changing his number, is all set to come in force all over India from January 20.

According to a notification issued by the Telecom Regulatory Authority of India (TRAI), the MNP would come into force all over the country from January 20.

'The authority in exercise of powers conferred by clause(b) of sub regulation(2) of regulation (1) of the Telecommunications Mobile Number Portability Regulations 2009 (08 of 2009) and for ensuring compliance with the terms and conditions of the licence and for protecting the interests of the consumers of the telecom sector hereby directs that regulations 6, 7, 8, 9, 10, 11, 12 and 13 of the Telecommunications Mobile Number Portability Regulations 2009 (8 of 2009) shall come into force in all telecom service areas in the country from January 20, 2011,' the notification by TRAI said.

The MNP has already come into force in Haryana on November 25.

The facility allows consumers to retain their mobile numbers while switching operators. Industry experts say that MNP gives rise to genuine competition, leading to an improvement in the quality of services by the service providers.

Telecom consulting firm Analysys Mason's data suggests a reasonably high subscriber churn after the launch of MNP of as much as 17 per cent in the prepaid and 19 per cent in the postpaid segment.

In the high average revenue per user segment, this level rises to 20 per cent, climbing to 22 per cent in the enterprise market and 18 per cent in the business category.

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Renault soft pedals its role in Bajaj small car

Bajaj Auto’s ultra low-cost car project may have a bumpy ride ahead, with partner Renault India still to take a final call on branding and marketing the vehicle.
“We have not seen the car being developed by Bajaj. We will take a decision on whether to partner on branding and marketing the vehicle only when we see the final product. The product being developed by Bajaj has to be a car for us to go ahead with the agreement,” said Jerome Stoll, executive vice-president (sales & marketing) at Renault.

According to a 2008 agreement, Renault and Nissan will brand, sell and market the Bajaj car. However, launch of the vehicle has been postponed twice in the last three years. The project has faced several delays on branding, pricing, distribution and marketing.

Bajaj Auto MD Rajiv Bajaj declined to comment on Stoll’s statement. In an emailed response, Bajaj said, “I have no comments at this stage.”

Renault’s take on the ultra low-cost car project comes at a time when the French automaker is preparing to independently develop a small car for the Indian market. Renault has a technical centre in Chennai manned by 1,500 people and has set up an engineering & design studio in Mumbai.

“The ultimate directive for the engineering & design studio is to understand consumer preferences and come up with a car for the Indian market,” said a senior executive at Renault’s local unit. The product will then be customised for markets such as Brazil and Russia.

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Tata Steel FPO opens tomorrow: Should you subscribe?

World's seventh largest steel maker Tata Steel's follow-on public offer (FPO) is set to open for subscription tomorrow. It has fixed price band of Rs 594-610 a share for its FPO of 5.7 crore ordinary equity shares of Rs 10 each.

The company aims to raise Rs 3385.8-3477 crore through the issue, which will close on January 21.

Experts are divided on the issue. Deven Choksey of KR Choksey and Manish Bhatt of Prabhudas Lilladher are positive on it while Investment Advisor, SP Tulsian has given a thumps down to the same.

"We are not excited by this Tata Group company’s FPO plans, as there is not enough left on the table for the prospective investors. Infact, value will be seen more in FPO of SAIL, as and when it will hit the market. Concern on global presence of Tata Steel still exists. Hence, we have given a thumps down to the issue on grounds of steep pricing, for those looking for listing gains. This issue may be attractive only for the lenders and institutional investors of the company," Tulsian said.

However, Choksey advises buying for long term investors. Even according to Bhatt the issue looks good.

Research firm PINC Research maintained buy on the stock with a target price of Rs 817.

The report says, "Contract prices for Q4FY11 has settled at higher level due to increased spot prices. Coking coal spot price continues to strengthen, as floods in Australia disrupt supply. We believe high raw material prices would exert further pressure on steel processing margin in FY12. However, integrated operation of Tata Steel India would benefit from rising steel prices on cost push."

"At FY12E EV/EBITDA of 4.8x and 4.9x at upper band of FPO and CMP respectively, the stock is attractively valued. We maintain buy on the stock with a revised target price of Rs 817 (blended 6.1x FY12E EV/EBITDA),” according to the report. The firm recommend subscribing to FPO.

Tata Steel has a steel production capacity of approximately 27.2 mtpa. According to WSA, the company was the seventh largest steel company in the world in terms of crude steel production volume in 2009. The company is also one of the most geographically diversified steel producers, with operations in 26 countries and a commercial presence in more than 50 countries.

Tata Steel intends to use issue proceeds for partly financing the company’s share of capital expenditure for expansion of existing works at Jamshedpur; and payment of redemption amounts on maturity of certain redeemable non-convertible debentures issued by the company on a private placement basis.

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GAIL Q3 net profit jumps 12.56% at Rs 968 cr

State-run GAIL has announced its results for the quarter ended December 2010. It has reported standalone net profit of Rs 968 crore as against Rs 860 crore, a growth of 12.56% on year-on-year basis (YoY).

Standalone net sales rose 35.19% to Rs 8,365 crore from Rs 6,187.8 crore (YoY).

Numbers were slightly above their estimates; CNBC-TV18 was expecting profit after tax at Rs 945 crore and sales at Rs 7800 crore.

In a press conference GAIL said:
-Profit boosted by gas trading, transmission
-All pipeline projects are on stream as of December 2010
-Will add additional 1500 km pipeline by December 2011
-Successfully completed bond issue of Rs 500 crore recently

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